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Saturday, December 9, 2023
HomeNewsEconomyADP Jobs Report Shows 176K, Economic Data Still A Mix Bag

ADP Jobs Report Shows 176K, Economic Data Still A Mix Bag

jobs report


The private sector added 176,000 jobs in August, according to the ADP jobs report from the payroll processor. The number missed expectations of 180,000. 

The number of Americans filing new claims for jobless benefits fell last week to a near five-year low, a sign of economic health that could help convince the Federal Reserve to wind down a bond-buying stimulus program.

Initial claims for state unemployment benefits slipped 9,000 to a seasonally adjusted 323,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 more applications received than previously reported.

Claims are now near their levels in January 2008, the early days of the 2007-09 recession. The lowest level this year was 322,000 earlier this month.

Economists polled by Reuters had expected first-time applications to fall to 330,000 last week, which may be explained by a department analyst admitting data for three states was estimated, because the states “did not provide data in time” for the report.

The four-week moving average for new claims, which is closely followed because it accounts for week-to-week volatility, fell to its lowest level since October 2007, before the recession began, dipping 3,000 to 328,500.

The report, unfortunately, has no direct bearing on Friday’s monthly employment report, which is expected to show employers outside the farming sector added 180,000 jobs to their payrolls in August.

But the claims data could reinforce confidence that the labor market is posting a slow yet steady comeback, however, that have been the hope and story for years.

Hiring moderated a bit in July and appears to have some pickup this month. That could cement expectations the Federal Reserve will announce a scaling back of its monthly $85 billion bond-buying program at its September 17-18 policy meeting. It has been making the monthly purchases to hold down interest rates.

The U.S. central bank has said it plans to start tapering the purchases later this year, but would be guided by economic data.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 43,000 to 2.951 million in the week ended August 24.

The pace of growth in the U.S. services sector accelerated in August to its fastest pace in almost eight years, an industry report showed on Thursday. The Institute for Supply Management (ISM) said its services index rose to 58.6, which is its highest reading since December 2005, from 56 in July. The reading easily topped economists’ expectations for a reading of 55 and beat the high-end of forecasts.

A reading above 50 indicates expansion in the sector, but we know that services have been increasing while manufacturing and others have sputtered. However, the report will likely fuel the view that economic growth is strengthening in the second half of the year, particularly after Tuesday’s ISM manufacturing report showed the sector growing at its fastest pace in 26 months. In truth, even though the manufacturing index was better than expected, readings over the last 26 months are not exactly hard to beat.

The new orders and business activity components hit their highest level since February 2011. New orders rose to 60.5 from 57.7 and business activity hit 62.2 after scoring 60.4 in July.

The key employment index hit its highest in six months, up to 57 from 53.2. Yet the Commerce Department reported that orders placed at U.S. factories fell 2.4% in July, which was still a smaller drop than the 3.3% economists expected.

We will be waiting for the report from the Bureau of Labor Statistics due on Friday with baited-breath.

Written by
Data Journalism Editor

Rich, the People's Pundit, is the Data Journalism Editor at PPD and Director of the PPD Election Projection Model. He is also the Director of Big Data Poll, and author of "Our Virtuous Republic: The Forgotten Clause in the American Social Contract."

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